At a Glance
- South Africa, U.S. resume trade talks to avert tariff hike before July 9 deadline.
- Pretoria proposes LNG imports, auto quotas, critical minerals fund to secure market access.
- South Africa eyes export diversification amid rising geopolitical, policy tensions with Washington.
South Africa is set to resume high-stakes trade negotiations with the United States, aiming to avert a sharp hike in tariffs that could disrupt key exports.
The talks will take place on the sidelines of the U.S.-Africa Business Summit in Luanda, Angola, from June 22 to 25—just weeks before a July 9 deadline that could see reciprocal U.S. tariffs triple from 10 percent to 30 percent.
At the heart of Pretoria’s proposal is a framework aimed at boosting two-way trade and investment.
The package includes increased imports of U.S. liquefied natural gas (LNG), a joint exploration fund for critical minerals such as lithium and cobalt, and duty-free quotas for South African auto and steel exports.
Auto and metals access key to U.S. market retention
The proposed deal includes an annual duty-free quota of 40,000 vehicles and unlimited tariff-free automotive components for U.S. assembly lines.
Pretoria is also seeking duty-free access for 385 million kilograms of steel and 132 million kilograms of aluminum annually.
South Africa has trailed trade peers such as India and the UK in clinching a deal with Washington.
But officials are hoping their offer will be enough to persuade U.S. authorities to delay the tariff hike until a formal agreement is signed.
Pretoria’s pivot: Trade diversification beyond the U.S.
“Our submission is intended to act as a stopgap ahead of July 9,” said Xolelwa Mlumbi-Peter, South Africa’s deputy director-general for trade, speaking to lawmakers in Cape Town last week.
Facing growing uncertainty, South Africa has launched a diversification plan targeting 22 priority export markets across Asia, the Middle East, and Latin America.
The government is also engaging private-sector exporters to fortify supply chains and reduce overreliance on the U.S. market.
LNG imports from the U.S. could reach up to 100 petajoules per year for a decade—potentially generating over $12 billion in bilateral trade.
Geopolitical frictions underscore trade tensions
Washington’s trade concerns with Pretoria span sectors such as citrus, meat, and autos—but also reflect unease over South Africa’s foreign policy alignment and investment climate.
The outcome of these negotiations could redefine its economic ties with the world’s largest consumer market.
With less than a month to broker a deal, the outcome of these negotiations could reshape South Africa’s trade trajectory and its long-standing partnership with the world’s largest economy.
